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Reliance Reports Q1 Results
04/26/2010 - Reliance Steel & Aluminum Co. reported for the 2010 first quarter ended March 31 net income of $44.7 million, a 122% increase from 2009 first-quarter net income of $20.1 million.
Reliance Steel & Aluminum Co. reported for the 2010 first quarter ended March 31 net income of $44.7 million, a 122% increase from 2009 first-quarter net income of $20.1 million. Earnings per diluted share were $.60 in the first quarter, up 122% from earnings per diluted share of $.27 a year ago.
Sales were $1.45 billion, down 7% from 2009 first-quarter sales of $1.56 billion, and up 14% from 2009 fourth-quarter sales of $1.27 billion. The 2010 first-quarter financial results include in cost of sales a pre-tax LIFO charge, or expense of $5 million, compared with a pre-tax LIFO credit, or income of $75.0 million for the 2009 first quarter. The LIFO adjustments, in effect, reflect cost of sales at current replacement costs.
Reliance’s tons sold for the first quarter were down 2% from the same period a year ago and up 9% from the 2009 fourth quarter. Average prices per ton sold were down 5% compared to the 2009 first quarter and up 5% compared to the prior quarter.
For the 2010 first quarter, carbon steel sales were 52% of net sales; aluminum sales were 19%; stainless steel sales were 15%; alloy sales were 8%; other sales were 4%; and toll processing sales were 2%.
“Business conditions continued to improve during the 2010 first quarter, allowing us to increase our FIFO gross profit margin to 26.3% compared to 17.9% in the 2009 first quarter and 25.0% in the 2009 fourth quarter,” said David H. Hannah, Chairman and CEO of Reliance. “Our sales dollars and tons shipped per day were our highest monthly amounts since February 2009. Demand continues to improve in most of our end markets; however, it is still at relatively low historical levels. Pricing for most of our products has increased to relatively healthy levels and current pricing volatility is manageable. Our 2010 first quarter results prove that the swift, albeit difficult, actions that we took over the past six quarters positioned us to operate at profitable levels even in this low demand environment. We were able to significantly improve our earnings even as our revenue dollars decreased compared to the 2009 first quarter.
“We continue to anticipate that demand for most of our products will recover slowly and steadily as the year progresses, with the exception of non-residential construction, where we expect some further weakness, although we believe we are close to the bottom,” Hannah continued. “We also expect pricing to remain at or near current levels during the 2010 second quarter, with the possibility of some downward pressure in the 2010 second half. One of the important catalysts for pricing in the second half will be the amount of real demand improvement, especially in light of some additional domestic carbon steel capacity entering the market at the producer level. This generally improving environment should allow us to continue to show modest improvements in our financial results for the 2010 second quarter. At this time, we estimate earnings per diluted share in a range of $.70 to $.80 for the 2010 second quarter,” he concluded.
On April 21, the Board of Directors declared a regular quarterly cash dividend of $.10 per share of common stock. The dividend is payable on June 23 to shareholders of record June 2, 2010. The company has paid regular quarterly dividends for 51 consecutive years.
Reliance Steel & Aluminum Co., headquartered in Los Angeles, Calif., is the largest metals service center company in North America. Through a network of more than 200 locations in 38 states and Belgium, Canada, China, Malaysia, Mexico, Singapore, South Korea, and the U.K., the company provides value-added metals processing services and distributes a full line of over 100,000 metal products to more than 125,000 customers in a broad range of industries.
